Smart phone screen/interface

A tangible outcome? An update on the patentability of computer-implemented inventions

The patentability – or not – of computer-implemented inventions in Australia has been in a contentious, even confusing state of affairs for some time. Hopes of a definitive ruling one way or another were dashed in 2022 when the High Court of Australia failed to produce a decisive ruling in the case of Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents [2022] HCA 29; 274 CLR 115 (Aristocrat). The Justices were split 3-3 in their ruling, and so the precedent devolved to the Full Federal Court (Aristocrat FCAFC) decision.

The issue has been addressed again recently in UbiPark Pty Ltd v TMA Capital Australia Pty Ltd (No 2) [2023] FCA 885 (UbiPark). The case involved the use of smartphones as a way to gain access to secure parking locations. The central issue was the alleged infringement of a patent (Australian Patent No. 2019213335) owned by TMA Capital Australia Pty Ltd (TMA) by UbiPark Pty Ltd. A number of claims and counterclaims were filed by each party, among which was a claim that the TMA patent was invalid on the grounds of it not comprising a manner of manufacture. Ultimately the court ruled that the patent did constitute a manner of manufacture, and was a valid patent.

What does it mean for an Australian patent application to be a manner of manufacture, and what does that have to do with computers? These are complicated questions with a long history. ‘Manner of Manufacture’ is a phrase appearing in the ‘Statute of Monopolies’, an English law from 1623, to which the Australian Patents Act refers directly.[1] 400 years of case law did not anticipate the arrival of computers and software in the 20th Century, and the Australian patent system has struggled to reconcile new technology with ancient law ever since.

Grant v Commissioner of Patents [2006] FCAFC 120 (Grant) stood as the relevant 21st-century position on what constitutes a manner of manufacture and hence a patentable invention regarding computer-implemented inventions.

It has long been accepted that “intellectual information”, a mathematical algorithm, mere working directions and a scheme without effect are not patentable… It is necessary that there be some “useful product”, some physical phenomenon or effect resulting from the working of a method for it to be properly the subject of letters patent.”[2]

Aristocrat had seemed like it would provide a much-needed update to this position but failed to deliver a binding verdict. As such, the two-step test applied in the preceding Aristocrat FCFCA decision stood as the relevant precedent: is the invention a computer-implemented invention? If so, does the invention describe an advance in computer technology?
Justice Moshinsky, in the UbiPark decision, draws from both sets of the 3-3 Aristocrat arguments. At [199] of UbiPark, Moshinsky J summarised the points that each High Court Justice has agreed upon in Aristocrat:

  • It is the substance of what is claimed, and not the form, that is important: therefore, correctly characterising the invention is critical
  • If an invention is not patentable when not implemented on a generic computer, it is not patentable when it is so implemented, and
  • An invention may be patentable when there is more than mere implementation, such as when the operation of the computer is improved.

Moshinsky J further cites the Kiefel CJ, Gageler and Keane JJ opinion of Aristocrat that affirms the position in Grant that a computer-implemented invention must have some tangible or observable effect. Along the same lines, the Justice also cites the other Aristocrat opinion of Gordon, Edelman and Steward JJ that emphasises that to determine patentability (and hence manner of manufacture), it is important to ask whether, properly characterised, the subject matter that is alleged to be patentable is: (i) an abstract idea which is manipulated on a computer; or (ii) an abstract idea which is implemented on a computer to produce an artificial state of affairs and a useful result. The artificial state of affairs and useful result may be a physical change in something, but it need not be. The artificial state of affairs may be an improvement in computer technology, but it need not be. It is enough that the artificial state of affairs and useful result are created by “the way in which the method is carried out in the computer”.[3]

As it applies to the UbiPark case, Moshinsky J declared that the patent was valid and did constitute a manner of manufacture because even though it was computer-implemented, it produced the tangible outcome of causing an entry or exit barrier to open. It was not specifically necessary that there be an improvement of the computer technology itself.

A single Justice of the Federal court is bound by the precedent set in Aristocrat FCAFC. It remains to be seen whether the applicant will appeal the decision of UbiPark, which would put the matter before the Full Federal Court. This court is not so bound and could reformulate the previous Aristocrat FCAFC precedent. Until then, creators of computer-implemented inventions have somewhat more hope for a successful patent application – if their invention causes some tangible or observable effect.

[1] Patents Act 1990 (Cth) s 18(1)(a).

[2] Grant v Commissioner of Patents [2006] FCAFC 120, [27].

[3] Ubipark [122].